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Independent retailers protest Jersey tax loophole
Archived article dated Wednesday June 15th 2005
Forum of Private Business calls for change in the law
A tax loophole which allows major retailers including Tesco and Asda to sell goods tax-free from Jersey has come under renewed fire.
The Forum of Private Business (FPB), is stepping up its campaign against retailers use of the Jersey law which means goods can be shipped free of VAT to the mainland as long as each item is sent separately and costs less than £18.Asda and Tesco are among the retailers which have set up operations on Jersey to sell CDs, DVDs and computer games at discounted prices. The lucrative market for vitamin supplements has also been targeted by a number of firms undercutting indpendent health retailers in the UK.
The Health Food Manufacturers' Association (HFMA) has now thrown its support behind the FPB campaign. The HFMA is concerned that Channel Island based businesses can not only sell goods cheaper, but they can also advertise using medicinal claims which would be illegal in the UK.
HFMA director David Adams said: "This loophole is absurdly unfair. The Channel Island firms are making great play of how much cheaper they are than the UK based businesses and it makes it very hard for us to compete. Moreover it is extremely frustrating that the Channel Island firms are making these quite outrageous medicinal claims, that would be illegal for British based firms to make, in letters being pumped out across the UK from the Channel Islands.
"These claims, for conditions as varied as arthritis, cancer, heart attacks, pain relief, sleep disorders and so on give them a hugely unfair competitive advantage over UK based firms. Action is needed now. The UK government has the power to close the VAT loophole as other member states, like France and Denmark, do. We also think that more pressure should be put on Channel Islands authorities to clamp down on illegal medicinal claims."
FPB chief executive Nick Goulding said the campaign for closing the loophole is gathering momentum. "British based small businesses must be able to compete on a level playing field. Firms, many of which are retail giants like Tesco, Asda, Boots and Specsavers, are undermining the tax system by exploiting this loophole and undermining small businesses who are playing by the rules and paying their taxes.
"The FPB restates its demand to the Government to act to close this loophole and end this anti competitive practice. It is hurting honest hardworking businesses many of which are high street shops who are already being squeezed by supermarkets, out of town shopping centres and the internet. We need the Government to stand up for small businesses and ensure they can compete fairly."
Tagged as: Forum of Private Business | Tesco | Asda | Boots | Specsavers
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